Korean Shipbuilders May Miss out on Rare Opportunity to Get Out of Recession

The Korean shipbuilding industry took first place for the fourth consecutive month, winning 74 percent of the world’s shipbuilding orders in August. However, some public opinions are criticizing the Korean shipbuilding industry, saying that Korean shipbuilders are rejecting a golden opportunity to get out of the darkness of a recession due to labor-management disputes as the Hyundai Mipo Dockyard labor union, like those of Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering (DSME), is showing a sign of going on a strike.

The National Labor Relations Commission will announce the results of an application for the suspension of a dispute mediation filed by Hyundai Mipo Dockyard shortly before or after the Chuseok holiday, said sources in the shipbuilding industry on Sep. 10.

The labor union secures their legitimate strike right if and when the commission judges in favor of stopping the mediation. If Hyundai Mipo Dockyard unionists stage a strike, it will break the shipbuilder’s record of not suffering from a labor strike for 22 consecutive years. A strike vote among union members earlier this month approved the strike plan by the labor union and elevated the possibility of going on a strike.

The labor union of Hyundai Mipo Dockyard will go on a strike if there is no change in the management’s positions even during negotiations after the Chuseok holidays. The labor union is demanding an increase in basic salary of 123,867 won (excluding pay raises for seniority), a 250 percent performance-based bonus with additional benefits, the adjustment of wage gaps among employees based on their service years and the guarantee of job security.

Other shipbuilders are in similar situations. The labor and management of Hyundai Heavy Industries have been negotiating since an ice-breaking meeting in May but no progress has been made yet. DSME also failed to reach an agreement. Apart from collective bargaining negotiations, difficulties are expected to face Hyundai Heavy Industries and DSME as their labor unions oppose a marriage between Hyundai Heavy Industries and DSME. Fortunately, the labor and management of Samsung Heavy Industries wrapped their wage negotiation on the same day.